How to start a restaurant business and run it successfully

Opening a restaurant is an exciting venture for many food entrepreneurs, but, as with any business in the early stages, it doesn’t come without challenges. From finding the right premises and hiring staff to calculating start-up costs and managing day-to-day operations, there’s a lot to figure out before your first customer walks through the door.

If you’ve been wondering how to start a restaurant business and set it up for the best chance of lasting success, this guide breaks down everything you need to know so you can build a restaurant that thrives. From business insurance and energy savings to broadband and finance, Bionic offers services designed to support you in running and growing your business. 

How much does it cost to open a restaurant? 

One of the first things on your mind when starting your business venture is likely - how much does it cost to open a restaurant? Opening a full-service restaurant in the UK is estimated to cost anywhere between £250,000 and £1 million in 2026. This includes various expenses such as premises and renovations, specialist kitchen equipment, professional services, staff and more. The final amount varies and depends on where you set up, the type of restaurant you want to run, and the scope and ambition of your plans. 

That’s why if you’re just starting out – a small takeaway, food truck or cafe can be a good place to start to test the demand for your business, especially if you don’t have the cash to invest in a restaurant. 

What are the key restaurant startup costs? 

When working out how to set up a restaurant business, you’ll need to think about both the initial investment and ongoing monthly expenses. Some of your key startup costs may include premises and renovation, furniture and equipment, licenses, professional services, initial inventory, technology setup, and pre-opening marketing. 

Once the business is up and running, you’ll need to budget for rent or mortgage payments, energy bills, staff wages, software, equipment maintenance and marketing. Unexpected expenses like equipment repair or rising food prices, are potential costs that you should also prepare for. 

Premises and renovations 

Choosing the right premises is one of the most important, early costs for new restaurant business owners. Rent or purchase costs can depend on location, size and local demand. Renovations are often required to bring the space up to safety standards and create an environment that reflects your concept. This may involve updating electrics, plumbing, ventilation, flooring, lighting and overall interior design. 

Equipment 

Equipment costs can take up another portion of a restaurant's startup budget. This includes essential kitchen appliances such as ovens, refrigerators, fryers and dishwashers, along with smaller equipment like cookware, utensils and prep equipment. The exact type of equipment you need will depend on the kind of restaurant you run, but here is a list of what you might need: 

Business rates 

Business rates are charged on most non-domestic properties, like shops, offices, pubs, warehouses, factories, holiday rental homes or guest houses. These charges are based on the property’s rateable value and are set by local authorities, meaning costs can vary widely depending on your location. It’s essential to factor business rates into your expenses as you’ll probably have to pay them if you use a building or part of a building for non-domestic purposes. 

Insurance costs 

All employers are legally obliged to have employers’ liability insurance to cover the cost of compensating employees who are injured or become ill as a result of their work. If you use a vehicle for business purposes, you’ll also need business vehicle insurance. Other covers to consider include public liability, product liability, contents and equipment cover and business interruption insurance. To make it easy, the best option might be a packaged restaurant insurance.  

Restaurant Insurance with Bionic can start from £2.38 a day* 

If you are unsure what type of insurance your business needs, the team at Bionic can help.  

*The price is based on the average of the bottom 10% of E-Trade policy invoices, on a rolling year basis between 01/07/24 & 30/06/2025, provided by Bionic. The per-day figure is based on an average of 30 days. Your actual price may vary. 

Energy costs 

Energy costs are also a substantial cost of running a restaurant. Budgeting for utility bills, including gas, electricity and water usage is essential, as these costs can shift with seasonal demand and operational hours. Investing in energy-efficient lighting and proper insulation can help reduce bills. It’s also worth comparing utility providers and considering fixed-rate contracts to provide more predictability. At Bionic, we work with a panel of regulated UK energy suppliers to help you compare energy suppliers and find options that may be suitable for your business.  

Professional services 

Most business startups need support from various professional services. This may include accountants, solicitors, architects, food safety consultants and HR or payroll specialists. These professionals help you meet legal requirements, manage finances and ensure compliance with health and safety regulations. While it might be tempting to limit these expenses, expert guidance early on can prevent costly mistakes and delays. 

Marketing and branding 

Marketing and branding are essential for building visibility and generating interest before your restaurant even opens. Initial costs might include logo design, website development, professional photography, social media setup, menu design and signage. Allocating funds to this area ensures your restaurant is seen, remembered and appealing to your target audience. 

What permits are required to open a restaurant? 

Food business premise registration 

To store, prepare, distribute or sell food on premises you need to be registered with your local authority at least 28 days before you start trading. Premises include restaurants, cafes, hotels, shops, canteens, market stalls, mobile catering vans, food delivery vans and businesses run from home. This is a legal requirement for all food businesses, is free to complete online via your local council's website. 

Food business premises approval 

To operate a business that manufactures or processes meat, meat products, minced meat, fish or fishery products, including shellfish, milk, dairy products and collagen, you may require approval from your local authority. You must contact your local authority to advise them of the activities which you intend to undertake, and they will decide if you are subject to approval or required to be registered. 

Music license 

For recorded or live music, you’ll need a licence from PPL PRS Ltd. Previously, businesses and organisations had to obtain separate music licences from PPL and PRS for Music. However, the two organisations have now come together to form PPL PRS Ltd and launched TheMusicLicence, which allows you to legally play music for employees or customers in your business through the radio, TV, other digital devices and live performances. 

Alcohol license 

If you plan to serve alcohol, you’ll need a premises licence under the Licensing Act 2003. To apply for a licence, you will need to complete an online application form and send it to your local council licensing team, along with the fee. There is a separate online application depending on whether you are in England and Wales, Scotland or Northern Ireland. 

Food safety training 

You are legally required to ensure staff working with food know how to handle food safely.  This can be done through on-the-job training, self-study, or prior experience, but formal certificates like the Food Hygiene Certificate or Level 2 Food Safety Certificate are common.   

This training is essential for chefs, kitchen staff, and servers, and covers critical topics such as maintaining personal hygiene, preventing contamination, and correctly managing food temperatures.  

How can I make sure my restaurant attracts customers and makes money? 

So, how can you ensure your restaurant attracts customers and actually makes money? The following strategies can help you draw in customers and keep them coming back. 

Choosing your USPs 

Start by getting clear on what makes your restaurant special. Your unique selling points (USPs) are the things that set you apart from the competition. Maybe it’s quality homemade dishes, an impressive cocktail menu, a cosy atmosphere or a focus on local, sustainable ingredients. 

Whatever your strengths are, make sure they’re obvious to customers and built into everything you do. When people know exactly what makes you different, they have a reason to choose you over the competition. 

Marketing strategies 

A big part of attracting customers is getting the word out there. Sharing photos, behind-the-scenes moments and updates on social media can draw attention and make your restaurant feel approachable. In addition, make sure your Google Business profile and website are up to date so people can easily find you, check your opening hours and browse your menu. You can also run paid advertising campaigns to target nearby audiences, helping to drive traffic to your restaurant. 

Customer retention 

Keeping customers coming back is just as important as getting them through the door the first time. Great service, friendly staff and a welcoming atmosphere go a long way. Other retention strategies include simple things like loyalty point cards, birthday treats or special deals for returning customers. Most importantly, listening to feedback and acting on it shows people you care about their experience. 

What are the biggest challenges and how can I overcome them? 

Challenges are common when running any type of business, and the hospitality industry is no exception. See below the biggest challenges facing hospitality and how businesses can overcome them. 

Financial pressures 

Running a restaurant places owners under financial pressure from both the demand and supply sides. On the demand side, hospitality companies depend largely on consumers' spending money in their establishments. When consumers have less cash in their pockets, fluctuations in consumer numbers can happen, making revenue unpredictable. On the supply side, inflation can mean increased operational costs resulting from rising prices. 

These combined pressures make maintaining healthy margins one of the biggest challenges for restaurant business owners. Managing rising operational expenses without affecting the quality of a product or service is crucial to keep your business operating. 

Recruitment 

Restaurant owners can struggle to find skilled staff due to high turnover, long working hours and competition from other employers. Retaining staff is equally difficult, as employees often move on for improvements in pay, culture and career progression. 

To overcome these workforce challenges, restaurant owners can invest in creating a supportive, engaging workplace culture, implementing clear career development pathways and offering competitive compensation packages where possible. Flexible scheduling and ongoing training can further improve job satisfaction, reduce turnover and build a loyal team. 

Seasonal fluctuations 

All sectors within the hospitality industry will experience fluctuations in demand. For restaurants in particular, busy seasons mean greater demand and increased profitability, but low seasons can mean drops in both demand and the amount of money you can make.  

But that doesn’t mean your business can’t thrive all year round. Restaurant owners should manage their cash flows to keep up with fluctuations in demand. Consider building relationships with local event organisers and corporate clients to help generate more revenue during quieter periods. Advertising private hire can also provide another income stream. 

Get your restaurant on its feet with help from Bionic 

Getting your restaurant up and running starts with the right foundation. At Bionic, we’re here to help with your business basics like energy, insurance, broadband and finance. We work with a panel of regulated UK energy suppliers and providers to get you a competitive deal. We’ll provide you with the tools and support you need, so you can manage costs and scale your business with confidence. Get in touch by starting a quote online today. 

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